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LRT construction: Businesses pay now, hope to profit in 2004

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September 10, 2002 // UPDATED 1:30 pm - April 30, 2007

By: Ellen Nigon

Ellen Nigon

Along 5th Street, closures, layoffs and floods -- but entrepreneurs see a light at the end of the tunnel

When the Pickled Parrot, a longtime Downtown bar and restaurant, closed last month, many of its neighbors surmised that the cause of death must have been lost business due to light-rail construction outside its 5th Street front door.

Actually, construction played only a small part in the Pickled Parrot's demise (see page 17). It's understandable, however, why others would finger LRT construction as a bird-killer -- because it's wounded many businesses along 5th Street.

"Construction kills business. The customers who have cars can't come here. They won't buy cigarettes or pizza if they have to park three or four blocks away," said Hesham Hema, manager at Sky Caf and Downtown Tobacco and Convenience, 8 N. 5th St.

Ask just about any retailer or restaurateur along Fifth Street in Downtown and they'll tell you that profits have dropped since the backhoes and drills took up residence last year. Since underground utility relocation began in mid-summer 2001, these businesses have struggled to maintain their customer base.

But while they bemoan their current situation, most of these businesspeople look forward to 2004, when the Hiawatha Light Rail Transit line could bring a projected 19,300 people to their doorstep daily.

Rosenthal Furniture: $500,000 down the drain

At Rosenthal Furniture, 22 N. 5th St., owner Rosie Lebewitz said before construction began in April, they were set to double the previous year's profit. "Business was absolutely phenomenal, until April," Lebewitz said.

Then construction hit and as the clich goes, "when it rains, it pours" -- literally.

Rosenthal's was hit with two floods related to light rail construction. In the first flood, they lost their entire stock of basement inventory. Lebewitz said that after construction crews tore up the sidewalk in front of the store, they failed to recover it before a spring downpour. "We lost over a half million dollars," Lebewitz said.

According to Lebewitz, the Hiawatha Light Rail office has covered some of the flood costs, but she said she still has claims pending.

On top of that, construction has restricted access to Rosenthal's loading dock. "You can't get a truck in from 5th Street," Lebewitz said. "We get huge pieces of heavy furniture and can't get our trucks in our own alley to use our own loading docks because they're blocking the street."

Because the trucks cannot pull up to the loading dock, Lebewitz said her employees have had to carry the furniture in, which has resulted in one injury.

"His back went out from carrying. That's a workman's comp claim," Lebewitz said.

And beyond the headaches of floods and injuries, Lebewitz said the construction has people wary of 5th Street and Downtown in general. "People don't want to come Downtown. It's filthy down here. The sidewalks have been closed. You have to walk two and a half blocks to get here. There's no access," she said.

Lebewitz said that despite the fact that construction won't be letting up anytime soon, she thinks business will start picking up. Although she can't explain it, she said that in September, sales have been better.

Lebewitz also looks forward to being right in front of the final stop on the Hiawatha Light Rail line. "Being the last stop on the rail, you can't help but see Rosenthal's," she said. "How could it do us any wrong if it draws people to our beautiful windows?"

Sky Caf: ill-timed expansion

Down the street at the Sky Caf and Downtown Tobacco and Convenience, business is bleak, and employees say they're amazed that the store survived the winter when customers were few.

"It's very bad. Business is down around $4,000 to $5,000 a week compared to normal business before construction," said Sal Elazab, Sky Caf's owner.

Elazab said that he did not take construction into account when budgeting for his restaurant. Before construction started, he expanded his pizzeria and opened the adjoining Downtown Tobacco and Convenience. While expanding into a construction zone was financially risky, Elazab said it needed to be done.

"We expanded the business because we need the space for the seating," Elazab said.

However, he did not expect construction to last so long. "We had no idea it was going to be this bad," he said.

According to Elazab, the saving grace during the disruptive construction has been the revenue from the other businesses he owns in the Twin Cities, such as downtown St. Paul's Mickey's Diner.

While those businesses help keep Sky Caf and Downtown Tobacco and Convenience afloat, Elazab looks forward to increased profits when the trains deliver customers to his doorstep.

"We know it's going to be good when the train goes. But how can you survive until the train goes?" Elazab said. "Having no business is hard."

Sew Biz: business up-- for awhile

Laurine Lewis is one of the few business owners along the light rail line who can credit construction with increasing her business.

Lewis owns Sew Biz, a tailor shop in the Marquette Building, 75 S. 5th St. When light-rail construction closed the city sidewalk in front of the building, pedestrians had to walk next to the Marquette Building under the building's overhang -- putting Sew Biz's ground-floor storefront right in their faces.

"I actually got busier," Lewis said.

But that boon was short-lived; the sidewalk reopened and Lewis became just another businessperson dealing with construction hassles. "Now, it's hard for clients to drop things off," Lewis said.

Lewis said that her business is way down, though she couldn't specify an amount. However, she's not sure how much of that she can attribute to construction and how much she blames on a culture that rarely dresses up anymore.

Because business was already dropping, Lewis said that she couldn't factor construction-related losses into her budget. "I've got myself about as lean and mean as I can be anyway," she said.

Still, Lewis is hopeful that when completed, Light Rail passengers will become her customers. "Thousands of people will be outside my door soon, so I hope it will be a dramatic upturn," she said. "I'll certainly have more visibility."